Health Reform Faces Difficult Senate Tests

Broad Disagreements Over Public Option, Cost, and Policies

Nov. 9, 2009 -- The health overhaul bill that passed the House of
Representatives late Saturday night contains lots of reforms to the medical
system. But many of them are likely to change substantially before they are
ever signed into law.

The Senate is also working on a health bill, and, while it is similar in
many ways to the bill passed by the House of Representatives, some of the
differences are fundamental. It is also an open question whether Democrats in
the Senate will be able to reach a compromise at all on President Barack
Obama’s top domestic priority.

The $1.2 trillion House bill tries to make insurance more accessible by
creating a national insurance marketplace, called an "exchange," where private
plans can offer coverage to individuals and small businesses who can’t find it
elsewhere. The coverage on the exchange has to meet government-mandated
coverage minimums.

In addition, the House approved a government-run public option plan that
would compete with private plans on the national exchange. Government analysts
predicted the public plan in the House bill would attract about 6 million
members. Analysts also warned it could have higher premiums because those
members may tend to be older and sicker than average.

The House bill also includes:

A mandate requiring individuals to carry health insurance starting in 2013.
Those who don’t buy coverage would have to pay a fine unless they can show
financial hardship or religious
objections.

A mandate requiring employers to purchase at least basic insurance coverage
for their workers. Employers with a total payroll under $500,000 are exempt
from the requirement. Businesses that don’t buy coverage would have to pay fees
into a coverage pool.

Subsidies to help people buy coverage. The bill expands the Medicaid health
insurance program for the poor to cover more people, and also offers tax
credits and cash assistance to help millions of individuals and families buy
coverage. The subsidies are on a sliding scale: Individuals making up to about
$43,000 per year and families making up to about $88,000 would qualify for
assistance. Those subsidies and credits are only available to U.S. citizens and
legal residents.

Limits on insurance companies. Insurers would no longer be able to deny
coverage based on pre-existing conditions and would not be able to drop policy
holders who get sick (a policy called “rescission”). Insurers could still
charge older policy holders higher premiums, however.